PC Jeweller share price tanks post buyback; No end to woes as 'Sell' calls trigger backlash
PC Jeweller share price rallied as much as 18.2 per cent on the BSE in early trade after the company announced its board has approved buyback of shares worth Rs 424 crore at an attractive price of Rs 350 per unit, a premium of 67 per cent against its Thursday's closing.
PC Jeweller share price pared all its early gains to lose over 5 per cent on Friday as the buyback announcement failed to maintain far less boost the momentum. The stock rallied as much as 18.2 per cent on the BSE in early trade after the company announced its board has approved buyback of shares worth Rs 424 crore at an attractive price of Rs 350 per unit, a premium of 67 per cent against its Thursday's closing.
After rising by up to Rs 247, the PC Jeweller share price slipped into red, losing as much as 5.5 per cent to Rs 197.50 on the BSE. "I would advise retail investors to stay away from PC Jeweller because it is a speculative counter and nobody knows the full story. With the buyback the company tried to establish a level, but it was clear the stock would crack post buyback, and that is exactly what happened," told market expert Sudip Bandopadhyay to Zee Business.
If someone has to play gems and jewellery segment, better to invest in Titan because all these issues with PC Jeweller and Gitanjali Gems has helped Titan emerge as a credible jewellery player. Secondly, India's consumption story is robust and a big part of which comprise jewellery sector. Titan will get advantage of the same," added Bandopadhyay.
Technical experts also suggested selling PC Jeweller shares at these levels.
In a regulatory filing, the Delhi-based jeweller said the board at its meeting held on Thursday considered and approved the buy-back of up to 1,21,14,286 fully paid-up equity shares of Rs 10 each.
The buy-back of 1.21 crore shares comprise 3.07 per cent of the total paid-up equity capital of the company, it added.
The promoters and promoter group companies would not participate in the proposed buy-back.
The board also approved appointment of IDBI Capital Markets & Securities Limited and Corporate Professionals Capital Private Limited as merchant bankers for the proposed buy back offer of the company.
The buy-back of shares has been announced by the company as its stock fell sharply to its 52-week low price of Rs 95.05 hit on May 3 this year after Fidelity managed funds sold shares through open market.
However, Balram Garg, managing director of the company has been maintaining that its fundamentals remain strong.
"We would like to assure our investors, shareholders and other stakeholders that there is nothing wrong with the company and its operations, the fundamentals of the company remain strong and it continues to move ahead on growth path," he said.